2012 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

1-30-2012

Gary Strausser v. Township of Forks

Precedential or Non-Precedential: Non-Precedential

Docket No. 10-4086

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Recommended Citation

"Gary Strausser v. Township of Forks" (2012). 2012 Decisions. Paper 1514.

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1

NOT PRECEDENTIAL

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

_______________

No. 10-4086

_______________

GARY STRAUSSER; STRAUSSER ENTERPRISES INC.

v.

TOWNSHIP OF FORKS; KARL KLINE, Esquire; DAVID L. HOWELL

_______________

On Appeal from the United States District Court

For the Eastern District of Pennsylvania

(D.C. Civil Action No. 5-09-cv-05859)

District Judge: Honorable Mitchell S. Goldberg

_______________

Submitted Under Third Circuit LAR 34.1(a)

January 23, 2012

_______________

Before: AMBRO, CHAGARES and HARDIMAN, Circuit Judges

(Opinion filed: January 30, 2012)

_______________

OPINION

_______________

AMBRO, Circuit Judge

Gary Strausser and Strausser Enterprises Inc. (“SEI”) appeal the District Court‟s 

order staying their suit against the Township of Forks, Karl Kline, and David L. Howell, 

pending the resolution of related state-court litigation. Because the District Court‟s stay 
2

order is not a “final decision[]” under 28 U.S.C. § 1291 and is not otherwise appealable, 

we dismiss for lack of appellate jurisdiction.

I.

Because we write solely for the parties, we set forth only those facts necessary to 

our decision. In 2000, the Township of Forks, Pennsylvania, tentatively approved SEI‟s 

plans for the construction of a residential real estate development. Things, however, went 

south. The Township and SEI are now caught in a thicket of litigation. 

In 2007, SEI sued Forks in the Pennsylvania Court of Common Pleas, alleging that 

the Township attempted to overcharge it for hundreds of thousands of dollars in 

inspection, engineering, and legal fees. See Strausser Enters., Inc. v. Twp. of Forks, No. 

C0048CV2007-005131 (Pa. Ct. Com. Pl.) (the “Fee Case”). The parties submitted the 

case to arbitration and the amount due to Forks was greatly reduced. 

After SEI filed the Fee Case, Forks filed three lawsuits of its own against SEI. In 

its first suit, Forks alleged that it owned eight maple trees SEI had removed near the edge 

of the planned development and that the trees‟ removal violated the Township‟s planned 

residential development (“PRD”) zoning ordinance. See Twp. of Forks v. Strausser, No. 

C0048-CV-2007-8272 (Pa. Ct. Com. Pl.) (the “Tree Case”). The Court of Common Pleas

has since granted SEI summary judgment in the Tree Case. SEI also filed a counterclaim 

in that proceeding for abusive litigation, among other things, but the Court of Common 

Pleas dismissed it. Two weeks after SEI filed its counterclaim, Forks sued SEI a second 

time, demanding that it replenish certain escrow accounts. Twp. of Forks v. Strausser 

Enters., Inc., No. C0048CV2009-l0928 (Pa. Ct. Com. Pl.) (the “Escrow Case”). That
3

same day, Forks filed its third lawsuit against SEI. See Twp. of Forks v. Strausser, No. 

C0048CV2009-10929 (Pa. Ct. Com. Pl.) (the “PRD Case”). In that action, Forks sought

a declaratory judgment that SEI‟s rights to certain phases of the development were

permanently terminated or forfeited. SEI claims that the Tree Case, the Escrow Case, 

and the PRD Case are baseless and nothing more than retaliation for its filing the Fee 

Case and a counterclaim in the Tree Case. 

SEI also asserts that Forks has retaliated against it in ways other than the 

prosecution of baseless litigation, including “the publication of false accusations of 

criminal, immoral and horrific conduct, and attempts to delay, frustrate and ultimately 

terminate [its] development rights.” SEI Br. at 4. For example, according to SEI, Forks 

improperly refuses to release funds from a letter of credit. SEI also claims that Forks has 

added substantial, punitive conditions to the development‟s final plans that were not 

included in the tentative plans. According to SEI, Forks changed its curb specifications, 

added construction of a drainage swale, and demanded that a road be widened. Forks 

also restricted the issuance of permits for Phase 7 of the development. This restriction, 

says SEI, prevented it from selling Phase 7 to another developer for $8 million. SEI had 

previously sold other phases of the development to other real estate developers. 

SEI filed the fifth suit in this saga in federal court. The complaint makes two 

claims against Forks, Kline (Forks‟s Solicitor), and Howell (Chairman of Forks‟s Board 

of Supervisors) under 42 U.S.C. § 1983: (1) retaliation against SEI for engaging in 

protected conduct under the First Amendment (i.e., filing the Fee Case and the 

counterclaim in the Tree Case), and (2) deprivation of SEI‟s right to the equal protection 
4

of the law. It also asserts two common law claims against Kline and Howell: (1) abuse 

of process, and (2) malicious prosecution. 

The District Court stayed the federal proceedings “until the resolution of the 

underlying state court proceedings so that [the Court] can determine whether the 

[d]efendants are entitled to Noerr-Pennington immunity.” The Court explained:

In a § 1983 action, a public entity is protected from liability pursuant to 

Noerr-Pennington for filing a lawsuit as long as the public entity is 

authorized by state law to file that lawsuit. Schneck v. Saucon Valley Sch. 

Dist., 340 F. Supp. 2d 558, 573 (E.D. Pa. 2004) (citations omitted). A 

public entity can only be liable for the filing of such a lawsuit if it was both 

objectively baseless and subjectively intended to abuse the process. Id. at 

574. Therefore, given the pendency of the underlying state civil litigation 

and its direct correlation to potential Noerr-Pennington immunity, a stay 

will provide all parties an opportunity to resolve the underlying litigation 

and will allow full consideration of all relevant facts and legal issues from 

those actions as they relate to the above-captioned action at a later time.

The Court ordered SEI‟s counsel to “notify the Court in writing within seven (7) days of 

the resolution of all related underlying state court actions.” 

SEI seeks to appeal the propriety of the District Court‟s stay order. At our 

direction, the parties submitted supplemental briefing on the appealability of the District 

Court‟s stay order.

II.

Under 28 U.S.C. § 1291, we have appellate jurisdiction over “final decisions” of 

district courts, “except where a direct review may be had in the Supreme Court.”

1

 

1 We also have appellate jurisdiction over certain interlocutory orders under 28 U.S.C. 

§ 1292 and the collateral order doctrine announced in Cohen v. Beneficial Indus. Loan 

Corp., 337 U.S. 541 (1949). SEI does not argue that the District Court‟s stay order fits 

either of these two categories. 
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Whether a decision is “final” depends on its effect. Marcus v. Twp. of Abington, 38 F.3d 

1367, 1370 (3d Cir. 1994). “Ordinarily, a final decision will have two effects. First, the 

decision will fully resolve all claims presented to the district court. Second, after the 

decision has been issued, there will be nothing further for the district court to do.” 

Aluminum Co. of Am. v. Beazer East, Inc., 124 F.3d 551, 557 (3d Cir. 1997); see also 

Catlin v. United States, 324 U.S. 229, 233 (1945) (“A „final decision‟ generally is one 

which ends the litigation on the merits and leaves nothing for the court to do but execute 

the judgment.”). Thus, “there is no final order if claims remain unresolved and their 

resolution is to occur in the district court.” Aluminum Co. of Am., 124 F.3d at 557. 

The “usual rule” is that a stay order is not a “final decision[]” under § 1291. 

Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 10-11 n.11 (1983). 

But, an order that stays a federal court suit pending the resolution of related state-court 

litigation is final and appealable if it “amounts to a dismissal of the suit.” Id. at 10. Such 

an order is final and appealable if it “surrender[s] jurisdiction of a federal suit to a state 

court” by “requir[ing] all or an essential part of the federal suit to be litigated in a state 

forum.” Id. at 10 n.11. However, the order is not final and appealable “merely because it 

may have the practical effect of allowing a state court to be the first rule on a common 

issue.” Id. 

Here, the District Court‟s stay order does not “amount to a dismissal of the suit.” 

Id. at 10. In its federal complaint, SEI alleges that it has been deprived of its rights under 

the First and Fourteenth Amendments. Win or lose in state court, SEI must return to the 

District Court to resolve these constitutional claims because they are not included in any 
6

of the pending state-court suits. Those cases involve only issues of substantive 

Pennsylvania law, such as whether Forks may require SEI to replenish certain escrow 

accounts and whether SEI‟s rights to certain phases of the development are terminated or 

forfeited. Therefore, the effect of the stay will not dispose of SEI‟s claims nor will it 

leave nothing for the District Court to do. 

To be sure, whether SEI prevails in state court will affect the character and scope 

of the federal litigation. However, this is not to suggest, as SEI argues, that the District 

Court is “requir[ing] all or an essential part of the federal suit to be litigated in a state 

forum.” Id. at 10 n.11. Instead, the District Court permissibly allowed “a state court to 

be the first rule on a common issue.” Id. If SEI prevails in state court, then the parties 

may return to District Court to litigate all the factual and legal issues pertaining to SEI‟s 

constitutional claims. But if SEI does not prevail, then we can assume (for present 

purposes) that SEI will be effectively precluded from proving that the state litigation was

objectively baseless. If the state litigation turns out not to be objectively baseless, then 

Forks can claim Noerr-Pennington immunity for filing and prosecuting the suits. 

Nonetheless, as noted above, SEI‟s complaint includes other allegations of retaliatory 

conduct unrelated to the filing and prosecution of the state lawsuits, allegations that 

cannot be shielded by Noerr-Pennington. These include SEI‟s allegations that Forks

improperly refused to release funds from SEI‟s letter of credit and improperly added new

conditions to the development‟s final plans. So even if the resolution of the state-court 

litigation effectively decides the Noerr-Pennington question in Forks‟s favor, SEI still 
7

has a possible path to recovery on its constitutional claims that it may pursue in District 

Court. 

SEI claims its case is similar to Trent v. Dial Medical of Florida, Inc., where we 

held that staying a federal negligence action pending resolution of a related state-court 

class action on the issues of duty and breach amounted to a requirement that all or an 

essential part of the federal suit be litigated in a state forum. 33 F.3d 217, 221 (3d Cir. 

1994). We disagree. Unlike SEI, Trent could not pursue his federal claims absent a 

favorable outcome in the related state-court litigation. Id. at 222. 

We have carefully considered the other cases SEI claims are comparable to its 

own, and also find them to be distinguishable. In Moses H. Cone, the federal and state 

proceedings involved the “identical issue of arbitrability.” 460 U.S. at 10. In fact, that 

issue was the “only substantive issue present in the federal suit.” Id. The Supreme Court 

explained that “a stay of the federal suit pending resolution of the state suit meant that 

there would be no further litigation in the federal forum; the state court‟s judgment on the 

issue would be res judicata.” Id. As a result, the plaintiff was “effectively out of 

court[,]” and the “stay order amount[ed] to a dismissal of the suit.” Id. In contrast, as 

explained above, resolution of the state suits in SEI‟s case will not resolve or prevent 

further litigation in federal court. 

Schall v. Joyce also does not suggest that the District Court‟s stay order is final 

and appealable. 885 F.2d 101, 102-03 (3d Cir. 1989). In that case, Schall sought to 

challenge in federal court the constitutionality of Pennsylvania‟s confession of judgment 

procedures and sought to have a judgment previously entered against her in state court by 
8

confession marked satisfied. Id. The district court in that case specifically directed 

Schall to go to state court to try to have the judgment in question opened or struck. As 

we explained, the district court‟s actions demonstrated a clear surrender of its jurisdiction 

to a state forum. Id. at 105. The court had directed Schall to try and obtain an important 

aspect of the relief sought in her federal complaint in a state forum. Unlike Schall, SEI 

will not obtain any relief on the constitutional claims raised in its federal complaint in the 

pending state litigation. 

The District Court‟s stay order serves only to delay deciding the claims in SEI‟s 

federal complaint. And “[i]f . . . [a stay] order only serves to delay the federal 

adjudication, it is not final and not appealable.” Marcus, 38 F.3d at 1372.

* * * * *

For the foregoing reasons, we dismiss for lack of appellate jurisdiction.